The Wealth Effect

Romney-Ryan: The Rich Voter's Dream Ticket

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Mitt Romney started off this campaign cycle as a noblesse oblige candidate. The son of a rich man, and a rich man in his own right, he faced something of a challenge running as a Republican. Really rich people can win elections in the U.S. But they generally do so when they run as traitors to their class, not as those who stand for the proposition that the main problem in the country is that members of their class are taxed too heavily. That explains why Franklin Delano Roosevelt won four presidential elections and Steve Forbes couldn’t make much headway in the Republican primary.

Romney’s personal story was one of a guy who had done very well deciding to give back. He hadn’t worked for several years, but instead had spent his time—and considerable amounts of his own money—running for president. Sure, Romney was a wealthy businessman, but his most notable achievements in public life had been running a nonprofit (the Salt Lake City Olympics) and expanding the social-insurance safety net in his own state.

When he began to campaign, he realized that at a time of widespread economic suffering, it would be unseemly to run on a platform that guys like him needed help. So he went out of his way to say that the rich weren’t deserving of any more solicitude than the already got: “I'm not concerned about the very rich, they're doing just fine.”

When Romney first introduced his economic plan, he generally called for extending the Bush tax cuts and eliminating the estate tax—measures that would hugely benefit those already making a lot of money. (Of course, until that point, the effective result of the Obama policy had generally been to extend those tax cuts too.) But there was a wrinkle, meant to distinguish between people at different levels of the income scale. The rich would continue to pay the existing rates on capital gains, dividends, and interest income. But his plan proposed to eliminate those rates entirely for families making less than $200,000 (or for individuals making less than $100,000.)

But when running to the center didn’t work for Romney in the primaries, he essentially abandoned the noblesse oblige. The Republicans’ blanket opposition to Obamacare made his championing of the individual mandate in Massachusetts a toxic topic. The antitax purity of the primary pushed him in line with the party’s general position—that the rich are suffering horribly under the existing tax code, that they pay plenty of taxes already, and that the solution to our economic woes is to lift the crushing tax burden off of entrepreneurs, business owners, and heirs.

Romney still acknowledges that folks like him and his vice-presidential pick Rep. Paul Ryan are doing OK in this economy and may not be deserving of much sympathy. At a fundraiser in the Hamptons in July, he noted, “If you’re here, by and large you’re doing just fine. And I don’t spend a lot of time worrying about those that are doing as well as you guys are, or how I’m doing.”

But on the stump, you don’t hear him talk much about his plan to give a special break on capital gains and dividend taxes to the under-$200,000 crowd. Instead, his standard speech is filled with talk of the need to cut the already-low tax burden on companies and the heroic high-earning individuals who create jobs. That’s paired with his promise to reduce the expense and availability of social insurance.

Romney advocates rolling back the Affordable Care Act in its entirety, which would have the effect of reducing the ranks of those with health insurance. He wants to reform Medicaid by capping spending and turning it into a block grant—which would likely result in far fewer poor people getting benefits. There’s a lot in his speech about what government should do for those with means, but very little about what sacrifices or contributions they should be making. More noblesse, less oblige.

His complicated tax situation isn’t helping matters. Romney doesn’t believe he is obligated to disclose details of his tax returns going back several years. (It’s been less noted, but he apparently doesn’t believe he’s obligated to disclose details of his most recent tax returns either. There are fewer than 90 days left until the election, and his accountants have yet to file his 2011 return.) Sure, a lot of the interest in his returns is politically prurient. But Romney has sent the message that, precisely because he is wealthy and makes so much money, he shouldn’t be expected to play by the rules that other candidates have. Meanwhile, his wife’s fancy horse has been competing in the most aristocratic Olympic event. A lot of noblesse, even less oblige.

Judging by the poll results and by the backstory rippling through the campaign, this tack wasn’t working. In part because of his personal style, in part because of his policies, and in part because of the Obama administration’s relentless attack, Romney is facing something of an empathy gap. On Friday, Jeff Zeleny of The New York Times documented the Romney camp’s concerns over the candidate’s inability to connect with Americans.

Which is why the appointment of Rep. Paul Ryan as his running mate is a little surprising. Ryan, a true-believing libertarian, is far less conflicted than Romney about molding policy to aid the wealthy and afflict the uncomfortable than Romney is. His much-vaunted plan pairs huge tax cuts for the wealthy with fundamental changes to the social-insurance safety net—far beyond anything Romney has proposed. The Ryan plan, which has effectively become congressional Republican policy, would turn Medicare into a voucher program for those currently under 55, and raise the retirement age for Social Security. It would eliminate taxes on interest, capital gains, and dividends for everybody (including the wealthy), and scrap the corporate income tax. Because Romney has been vague about filling in the details of his plan, chunks of the Ryan plan will effectively become his platform.

To whom much is given, more tax breaks will be given. To those who have less, tough. The Romney-Ryan ticket now seems to be all noblesse, no oblige.